CAREER POINT Infosystems Ltd. Initial Public Offering 1
Disclaimer Career Point Infosystems Limited (the “Company” or “CPIL”) is proposing, subject to requisite approvals, market conditions and other considerations, a public issue of its equity shares of face value of Rs. 10 each (“Equity Shares”) and has filed a Red Herring Prospectus (“RHP”) with Securities and Exchange Board of India (“SEBI”) and Registrar of Companies (“ROC”). The RHP is available on the website of SEBI and the respective websites of the book running lead managers, being Centrum Capital Limited (www. centrum. co. in) and JM Financial Consultants Private Limited (www. jmfinancial. in). “The information contained in this presentation has not been independently verified by the Book Running Lead Managers. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. None of the Company nor any of its respective affiliates, advisers or representatives, including Book Running Lead Managers and their affiliates, shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. The Company may alter, modify or otherwise change in any manner the contents of this presentation, without obligation to notify any person of such revision or changes. Certain statements made in this presentation may not be based on historical information or facts and may be "forward looking statements", including those relating to the Company’s general business plans and strategy, its future financial condition and growth prospects, and future developments in its industry and its competitive and regulatory environment. Actual results may differ materially from these forward-looking statements due to a number of factors, including future changes or developments in the Company’s business, its competitive environment, information technology and political, economic, legal and social conditions in India. However, there is no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forwardlooking statements, which speak only as of the date of this presentation. Please note that this presentation is based on the RHP filed with SEBI and ROC and supplemented with information in the public domain. This communication is for general information purposes only, without regard to specific objectives, financial situations and needs of any particular person. Please note that investments in Equity Shares are subject to risks including loss of principal amount. Book Running Lead Managers and their affiliates do not accept any liability whatsoever, direct or indirect, that may arise from the use of the information herein. This presentation can neither be used, reproduced, copied, distributed, shared, or disseminated in any other manner nor can be redistributed to any other person. This presentation is being furnished to you solely for your information. This presentation does not constitute an offer or invitation to purchase or subscribe for any Equity Shares in the Company and neither any part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Any decision to purchase shares in the offering should be made solely on the basis of the information contained in the Red Herring Prospectus (if resident in India) or the Red Herring Prospectus and international wrap (if resident outside India) to be issued in connection with the offer and sale of the Company’s Equity Shares. Book Running Lead Managers and their affiliates may from time to time perform investment banking or other services for, or solicit investment banking or other business from, any entity mentioned in this presentation. Investors and prospective investors in Equity Shares of the Company mentioned herein are required to make their own independent investigation and appraisal of the business and financial condition of the Company and the nature of the Equity Shares. By participating in this presentation or by accepting any copy of the slides presented, you agree to be bound by the foregoing limitations. This presentation has not been and will not be reviewed or approved by any statutory or regulatory authority in India or by any stock exchanges in India. ” 2
Today’s Discussion Issue Summary Who We Are Why We Can Continue to Grow Our Experienced Faculty & Management Our Financial Track Record Our Investors Investment Rationale 3
Today’s Discussion Issue Summary Who We Are Why We Can Continue to Grow Our Experienced Faculty & Management Our Financial Track Record Our Investors Investment Rationale 4
Issue Summary Issuer Issue Size Dilution Price Band Offer Period Objects of the Issue Career Point Infosystems Limited (“CPIL”) Primary issue of [●] Equity Shares aggregating Rs. 1, 150 mn [●] % Rs. [●] to Rs. [●] per Equity Share of Face Value Rs. 10 Sept 16, 2010 – Sept 21, 2010 (Bidding for QIBs shall close on Sept 20, 2010) To construct and develop an integrated campus facility – Rs. 682. 50 mn Expansion of classroom infrastructure and office facility – Rs. 164. 86 mn Acquisitions and other strategic initiatives – Rs 150. 00 mn General corporate purposes – Rs. [●] Issue Structure Listing Book Running Lead Managers QIB Portion: At least 60% of the Net Issue out of which 5% shall be available for allocation on a proportionate basis to Mutual Funds Up to 30% of the QIB portion may be allocated to Anchor Investors, of which at least 1/3 rd shall be available for allocation to Mutual Funds Non Institutional portion: 10% of the Net Issue Retail Portion: 30% of the Net Issue Bombay Stock Exchange Limited National Stock Exchange of India Limited JM Financial Consultants Private Limited Centrum Capital Limited 5
Today’s Discussion Issue Summary Who We Are Why We Can Continue to Grow Our Experienced Faculty & Management Our Financial Track Record Our Investors Investment Rationale 6
Who We Are TUTORIAL SERVICES ECAMS & ISS Tutorial services to high school and post high school students for competitive examinations like: ECAMS: Education Consultancy and Management Services – All India Engineering Entrance Examination (AIEEE) ISS: Infrastructure Support Services – State Level Engineering Entrance Examination (SLEEE) Provide necessary management services Rendering infrastructure and allied services for setting-up of physical infrastructure for educational institutions – Indian Institute of Technology – Joint Entrance Examination (IIT-JEE) Catering to K-12 and Higher Education segments – All India Pre-Medical Test (AIPMT) / Pre. Dental Test (PDT) ECAMS and ISS offered to trusts Singhania University Offshoot Global Public School Career Point University* * Proposed to be established through Gopi Bai Foundation Trust, Kota 7
How we have grown: Evolution into a Comprehensive Learning Solutions Provider an ing as ing e learn erg r Em ensiv ovide eh n pr pr o com soluti Growth new into ents ng gm e ndi xpa ts & s E ke r ma ► Equity investment by 2008 -09 g nin the Kota eng n Str nce i ese Pr ► Executed 2006 -07 ► Ventured into of Company operated training centres 2002 management cooperation agreement with Singhania University for establishing university off-campus ► Launch of synchro- ► Launched tutorial services through franchisee centres 1993 2009 -10 school programme ► Received investment from Volrado Venture Partners ► Training centre set up under proprietorship firms of Mr. Pramod Maheshwari Tutorial Services to Comprehensive Learning Solutions Provider FTPES 1 and Nadathur Raghavan 2 aggregating Rs 600 mn. ► Executed Mo. U with Hughes Communications India Ltd for providing tutorial services through VSAT ► Executed management services agreement with Gopi Bai Foundation Trust for providing management services to Global Public School ► Executed Mo. U with Gopi Bai Foundation Trust Kota (Raj. ) for providing ECAMS for the proposed university at Kota. Timeline Starting from Kota in Rajasthan, Career Point today is a comprehensive provider of learning solutions Note: 1: Franklin Templeton Private Equity Strategy – A/C PMS 2. For and behalf of Kalpa Partners 8
Today’s Discussion Issue Summary Who We Are Why We Can Continue to Grow Our Experienced Faculty & Management Our Financial Track Record Our Investors Investment Rationale 9
Growth Drivers for Education Industry Increasing population and lower literacy rate Increasing per capita income Budget plan for 2009 -10 Increasing population and constitution of 32. 6% of population in the age group of 0 to 14 years will lead to increase in number of schools, colleges and universities. 1 Adult literacy rate of India is lower than that of countries like Malaysia (92%), China (93%), Burma (90%), Saudi Arabia (85%) and UAE (90%). 2 To improve the literacy rate plans like SSA, MDM etc have been introduced by Government Per capita income showing a rise of 9% from CY 09 to CY 10 e 3 Increasing per capita income expected to contribute to increase the spending on education. During 2009 -10, for developing existing Universities, colleges and institutes, Government has made an outlay of approx 4. : – Rs. 94 billion towards Plan expenditure – Rs. 19 billion towards Non-Plan expenditure India is migrating towards a services driven economy Migration to Knowledge Economy Contribution of service and industry sectors to GDP increasing year on year. 5 Lateral shift to a services economy is resulting in migration of people to cities and towns leading to mass urbanization Increasing urban population and demand for skilled workforce creates the need for education Source: 1. UNESCO Institute of Statistics, World Bank, UNAIDS, ILO, Household Surveys, IMF, Country Data are for the most recent year available in 2000 -2005 2. Human development reports 3. Central Statistical Organisation 4. Department of Higher Education 5. Central Statistical Organisation 10
Industry Growth AIEEE CAGR: 19. 4% IITJEE CAGR: 9. 5% Source: Website of AIEEE Source: IIT press release and website of IIT Madras, JEE and wikipedia AIPMT Source: CBSE Annual Report FY 09 CPT Source: Website of ICAI 11
Our Expanding Pan India Presence Tech. Edge Class Knowledge Labs Synchro School Company Operated Training Centres Franchisee Centres Distance Learning Services 12
Tutorials: Multiple Modes of Delivery COMPANY OPERATED TRAINING CENTRES Provide tutorial services Adopted standardized teaching and testing methods. R&D Cell regularly update standardised methods 17 Company Operated Training Centres* Fees are collected in a lumpsum and installment basis (depending upon the course) FRANCHISEE CENTRES Demonstrate our methodologies to our franchisees DISTANCE LEARNING SERVICES * As on July 31, 2010 16 Franchisee Centres spread across India* Distance learning programme comprises of the following: Typical franchise agreements: correspondence courses – 3 -4 years test series courses – Payment of an upfront fee and % of the gross fees from student enrollment Regular guidance through correspondence. Targeting expansion into high potential demand cities for education services with current limited presence Team of faculty members for distance learning programmes * As on July 31, 2010 ENROLLMENTS 13
Tutorials: Innovative Teaching Platforms Tutoring for entrance examination integrated with school education through association with schools Delivery platform benefits: – no infrastructure costs incurred – obtain access to broad student base – no substantial marketing costs. Programmes are funded by either school or by students Operate at 2 locations Intend to tie-up with more schools Benefits to us: – penetration and student enrollments – relatively low investment – explore new areas of business for competitive advantage Recorded audio video content delivered by our key faculty members and added to our content repository Provide a personalized learning environment Based on the premise of ‘reinforced learning’ which means that students forming part of heterogeneous group possess different levels of knowledge retention capability. Virtual classroom environment Replicates model of a real classroom with the help of VSAT/VPN technology Students interact with instructors online Able to deliver lectures at multiple locations simultaneously Benefits to us: – Minimizing time and cost of resource deployment – Minimum human interface – Expand offerings to remote locations – Cover areas where setting up centre is not economically viable Have an agreement with Hughes Communications India Limited for providing satellite based interactive services across India. CPIL uses the two way interactive VSAT technology for setting up satellite classrooms 14
ECAMS & ISS Leveraging our content & management experience and the demand for asset light models… Revenue Model ECAMS & ISS: Robust Service Capability 100% Subsidiary Career Point Infra Ltd. Development of educational institution infrastructure Lease Rent Trust Management Fees Provide content, IT and management Services Career Point Infosystems Ltd. Enter into ECAMS contract with educational institutions Provide necessary management services which include: – location identification – laying strategic plan – human resource management services (teaching as well as non-teaching staff) – administrative services – advisory services (facilitation and assistance in securing licenses, clearance and ‘no-objection certificates’) – information technology related services – marketing, branding and education development activities – management and maintenance of complete financial system – conducting cultural, social and sports activities Provide Infrastructure Support Services where asset light institutions would outsource their capital intensive infrastructure requirements and allied services for setting-up of physical infrastructure Leverage upon our rich experience in understanding the dynamics of infrastructure requirements in the education sector ECAMS & ISS Presence Singhania University Offshoot Global Public School Career Point University* * Proposed to be established through Gopi Bai Foundation Trust, Kota 15
Growth Strategy STRENGTHEN EXISTING SEGMENTS EXPANSION IN OFFERINGS Develop integrated campus Leverage and expand content Utilize ECAMS to deliver formal education LEVERAGING ON TECHNOLOGY Use innovative digital products to reach students Initiatives Developing an integrated campus facility to address the overall needs of students and thereby increase the enrollments Global Public School Career Point University (Proposed to be established through Gopi Bai Foundation Trust) Strong brand coupled with geographic expansion to attract students and faculty in greater numbers Plans to operate schools and our subsidiary to set up school infrastructure Strong track record enabled creation of self generating cycle Cater to the huge unmet demand for higher education Intending to partner with Government under the PPP model Standardize content and monetize it at minimal incremental cost, resulting in better margins With a multi pronged growth strategy, CPIL plans to strengthen existing capabilities while developing new offerings to emerge as a comprehensive learning solutions provider 16
Today’s Discussion Issue Summary Who We Are Why We Can Continue to Grow Our Experienced Faculty & Management Our Financial Track Record Our Investors Investment Rationale 17
Experienced Promoters Age (Yrs) Experience (Yrs) Chairman, Managing Director & CEO 39 Om Prakash Maheshwari Wholetime Director & CFO Nawal Kishore Maheshwari Wholetime Director Name Designation Pramod Maheshwari Education Profile >15 B. Tech from IIT Delhi Director of the Company since March 2000 First generation entrepreneur and the key founder member of our Company Over 15 years of experience in developing and implementing training methodologies Plays a major role in providing thought leadership and strategic guidance, in addition to supervising the functional heads 41 >16 B. E from Rajasthan University Co-founder of Career Point Responsible for project implementation as well as financial and legal matters 35 >9 B. Com from Maharshi Dayanand Saraswati University Associated with the Company since incorporation In-charge of various functions including administration, liasoning and other day to day affairs of the Company 18
Key Managerial Personnel Age (Yrs) Experience (Yrs) Sr. Vice President – Academics & Product Development 38 Mithilesh Dixit Sr. Vice President School & Vocational Education Rajneesh Goyal Vice-President Academics Test Preparation Name Designation Shailendra Maheshwari Education Profile 13 B. E from University of Rajasthan With Career Point group since 1995 Working Experience of 13 years in the teaching field Grown to fame as ‘Math Guru’ through his coaching and guiding students for competitive examinations Formulates and monitors the implementation of an effective academic system Company wide. 48 >27 MSc. from Over 27 years experience in the army, Madras academic and corporate sector with University and specific exposure to corporate affairs MBA and Has worked with ABC Investment and Doctorate Management Company in USA from Trinity Current responsibilities include University, managing the formal and vocational USA education departments 34 9 B. E from University of Rajasthan Spent nine years in the field of education Currently, he is overall in charge of the mathematics department. Worked as a lecturer in the Engineering College, Kota 19
End-to-End Business Model Offering Quality Courses Quality content developed by experienced faculty members Continuous assessment and updation of course content through our R&D cell Standard delivery procedure of content delivery laid for our faculty members Assessment of content delivery through regular feedbacks Strong Brand Geographic presence Access to major markets of northern and eastern India through presence in 13 states of India Kota center attracting students from Singapore and Middle East as well. Introduced technology enabled education delivery platform through tie-up with Hughes Communications India Limited for delivery of content to broader student base Experienced Management and Faculty Team Experienced faculty members from IIT, NIT and other colleges in India In-house training facility for on teaching methodologies, skills and subject matter of relevant courses Senior management team having relevant collective experience of 65 years Presence in Formal Education Provides Education Consultancy and Management Services to K-12 and Higher Education segments Provides Infrastructure Support Services for educational institutions through our wholly owned subsidiary. 20
Today’s Discussion Issue Summary Who We Are Why We Can Continue to Grow Our Experienced Faculty & Management Our Financial Track Record Our Investors Investment Rationale 21
Key Financials (Standalone) Revenue CAGR (07 -10) : 31. 2% Profit After Tax CAGR (07 -10) : 18. 4% EBITDA CAGR (07 -10) : 18. 3% Networth CAGR (07 -10): 82. 7% 22
Key Financials (Consolidated) Revenue CAGR (07 -10) : 29. 9% Profit After Tax CAGR (07 -10) : 14. 0% EBITDA CAGR (07 -10) : 15. 4% Networth CAGR (07 -10): 81. 1% 23
Today’s Discussion Issue Summary Who We Are Why We Can Continue to Grow Our Experienced Faculty & Management Our Financial Track Record Our Investors Investment Rationale 24
Shareholding Pattern Break-up of Public Shareholding % of Total Shareholding Franklin Templeton Private Equity 13. 95% Volrado Venture Partners 6. 94% Mr. N S Raghavan (for and on behalf of Kalpa Partners) 2. 37% Others 1. 38% Total 24. 65% Attracted private equity investors Note: 1. Shareholding pattern as on the date of filing the RHP with SEBI and ROC 2. Equity share capital as on the date of filing the RHP : INR 144. 20 mn 3. Final post issue shareholding pattern will be determined after the allotment of Equity Shares pursuant to the initial public offering 25
Today’s Discussion Issue Summary Who We Are Why We Can Continue to Grow Our Experienced Faculty & Management Our Financial Track Record Our Investors Investment Rationale 26
Investment Highlights Strong Brand Equity Track record of Career Point group for over 16 years Content Repository Growth strategy in Formal education and Tutorial services Experienced Management Team Technology aided training Trained and qualified faculty Comprehensive Learning Solution Provider Strategy to consolidate our position as a comprehensive learning solutions provider 27
Thank You 28
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